US long-term mortgage rates fell this week to a record low for the 16th time in 2020, reflecting an economy hard hit by the coronavirus pandemic
Mortgage giant Freddie Mac said on Thursday that the average rate on the 30-year fixed-rate home loan fell to a record low of 2.66%, from 2.67% last week. A year ago, it was 3.74%
The average rate on 15-year fixed-rate loans, popular with homeowners looking to refinance their mortgages, dropped from 2.21% to 2.19%. A year ago, it was 3.19%.
The 5-year adjustable rate mortgage remained unchanged this week at 2.79%. A year ago, it was 3.45%.
Helped by very low rates, the housing market has been a source of strength in an economy hit by the coronavirus outbreak. The Federal Reserve pushed the interest rate it controls to zero in an effort to help the economy recover from a spring close.
But home sales have stagnated due to a lack of real estate on the market. On Wednesday, the Commerce Department reported that sales of new single-family homes plunged 11% from October to November, although purchases remain almost 21% above the previous year.
“Moving on to 2021, we expect rates to remain stable, but the main driver in the short term will be the trajectory of the pandemic COVID-19 and the execution of the vaccine,” said Freddie Mac chief economist Sam Khater.